WASHINGTON - President Bush yesterday proposed an array of tax incentives to encourage businesses, farmers and individuals to reduce pollution as an alternative to an international global warming accord he said would hurt the U.S. economy.

Associated Press Demonstrators at the Capitol in Washington yesterday protest the proposed storage site for nuclear wastes in Yucca Mountain, Nev. The rally comes in the aftermath of a briefing between Energy Secretary Spence Abraham and President Bush earlier in the week during which the President was told about why a nuclear waste dump should be built at Yucca Valley and not any other destination in the country

Bush last year rejected the Kyoto Protocol, which required 40 industrialized nations to reduce their carbon dioxide emissions - the so-called greenhouse gases believed to cause global warming.

He said the treaty - worked out by the Clinton administration but not ratified by the Senate - could cost millions of American jobs. The pact commits industrial nations to roll back greenhouse gas emissions to 1990 levels.

"We need to recognize that economic growth and environmental protection go hand in hand," Bush said at the National Oceanographic and Atmospheric Administration in Silver Spring, Md., where global climate changes are monitored.

He said he was offering "a new environmental approach that will clean our skies, bring greater health to our citizens and encourage environmentally responsible development in America and around the world."

Bush set a goal of reducing greenhouse gas emissions by 18 percent in 10 years by giving companies incentives to cut emissions, finding alternative forms of energy, increasing conservation and increasing research and development for technology to reduce pollution.

Dan Becker, a spokesman for the Sierra Club, said linking greenhouse gas output with economic activity would be "nibbling around the edges" of the issue.

"This is a series of voluntary steps that are linked to the health of the economy in a way that makes America a fair-weather friend of the global climate," Becker said. "When the economy is booming, we'll do something modest; when it isn't, we'll dump global warming over the side."

White House spokesman Ari Fleischer said Bush discussed the proposal yesterday with Spanish Prime Minister Josˇ Maria Aznar, who holds the European Union's rotating presidency. Secretary of State Colin Powell and national security adviser Condoleezza Rice called other world leaders, he said.

"Most of the leaders said, 'It sounds thoughtful, sounds good. We'll listen to the president and let you know,'" Fleischer said.

Bush seeks to draw more businesses into a registry of companies that report their greenhouse gas output to the government. They then could trade newly created credits with each other, much as they can under Clean Air Act provisions aimed at curbing acid rain.

Currently, just 222 companies, mostly electric utilities, register and report. The Bush administration does not have a firm goal for how many businesses it seeks to attract to the program.

One incentive to join would be a guarantee that businesses could use the credits in any future system.

Bush says that maintaining and improving about 80 other programs can also help slow greenhouse gas emissions. Through tax incentives, he would urge farmers to plant carbon dioxide-absorbing trees, consumers to buy hybrid and fuel-cell cars and solar water heaters and industry to capture methane, a potent greenhouse gas, from landfills.

He also would use tax breaks to encourage wind and "biomass" energy generation, in which burning grass, trees and waste produces electricity.

The president's proposed budget allocates $4.5 billion for global climate change-related activities, a figure the administration said would be a $700 million increase.

Bush would direct his Cabinet secretaries to lean on those they deal with to make "real commitments" to cut greenhouse gases.

The Environmental Defense Fund dismissed the 18 percent goal, saying it guaranteed greenhouse gas emissions would grow as long as the economy did.

In a separate effort, Bush also seeks an "unprecedented" reduction in power plant emissions of sulfur dioxide, nitrogen oxide and mercury, which the administration called the worst air pollutants.

This would be a "cap-and-trade" program in which the government would set mandatory ceilings on total industry output, and let companies earn and trade credits.

He steered clear of seeking to regulate power plants' output of carbon dioxide, the most prevalent of the greenhouse gases. Bush had promised during his presidential campaign to regulate carbon dioxide from power plants, but reversed himself last year.